Department of Finance Commissioner nominee Kirk Callwood told lawmakers during a Committee on Finance hearing Tuesday that pay raises implemented by Governor Kenneth Mapp and further solidified by the 32nd Legislature, whose senators codified the governor’s action, will be hard to sustain once federal dollars such as the Community Disaster Loan (C.D.L.) and other cash vehicles are exhausted.
Responding to a question posted by Senator Javan James, who cited Senate documents showing salary increases approved for Fiscal Year 2019 totaled $25 million, Mr. Callwood said, “Given the flow of funds and the C.D.L.s and the different cash vehicles, we should be able to pay it out, but after federal dollars and after the markets are fully dried up, then we’re going to be in trouble.”
Asked whether the administration had a plan to tackle the problem, Mr. Callwood said, “A plan is being thought of, [we’re] trying to come up with innovative ideas, but I don’t have anything concrete at this time.” The acting commissioner said he wasn’t aware of any plan to cut jobs.
When former Governor Kenneth Mapp announced the increases on July 30, 2018, he told The Consortium that the raises would be paid for and sustained by economic growth, including the recently ratified oil refining agreement on the south shore of St. Croix, along with economic activity spurred by hurricane recovery projects.
“None of the revenues that are going to be derived from the Limetree Bay [agreement] is currently contained in the proposed Fiscal Year 2019 budget,” Mr. Mapp said. “And as you may know, the Fiscal Year 2019 budget provides for $131 million of new revenues as a result of the recovery and the projects that we are undertaking in the community. And so these revenues that we expect within the next year have to be quantified and added into our budgets that will be able to accommodate these changes in salary, but more importantly, allow us the opportunity to drive our recruitment campaign forward.”
But while the former governor spoke of sustaining the increases through economic growth, the Bryan administration has cautioned Virgin Islanders that the road ahead will be difficult. During his first State of the Territory Address, Governor Bryan described the territory’s present state as being “distressed”, and listed a myriad of weak points of the government, among them a structural deficit said to be $450 million. And while Mr. Callwood told lawmakers on Tuesday that the government had $36 million cash on hand as of earlier this week, which equated to 16 days, senators said the number wasn’t a true representation of the government’s financial state, as tens of millions of dollars are owed to vendors.
The following departments and agencies were included in Mr. Mapp’s executive order for base pay increases.
The Department of Education
The starting salary of teachers territory-wide climbed to $44,000 annually, or roughly $21.15 per hour. (If a teacher’s base salary is at or above $44,000 annually, this teacher will see no change in pay, the governor said.)
Governor Mapp also signed a two-year contract that will give teachers long-awaited step increases following an almost nine-year stall.
The Department of Health
The Department of Planning and Natural Resources
The Department of Licensing and Consumer Affairs
Bureau of Corrections
VI Fire Service
Virgin Islands Police Department
Department of Human Services